Ryan Streeter
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We are facing a growing - even unprecedented - crisis in America that receives little attention from policymakers. Ron Brownstein's National Journal article today reinforces a theme we covered in our interview with Ron Haskins - younger workers are detaching from the workforce at alarming rates.
Brownstein writes:
Federal statistics show that on average during the 1950s, the share of Americans ages 16 to 24 in the labor force (52 percent) was nearly 12 percentage points higher than the share of Americans 55 and older (just under 41 percent). By the 1990s that gap in the labor market participation rate for the youngest and oldest adults had widened to nearly 30 percentage points. At that point, Americans younger than 24 were twice as likely to be employed as Americans older than 55.
But that spread began narrowing after 2000, and it has closed with unprecedented speed during the slowdown. Since December 2006, the employment-to-population rate for young people has fallen by a dizzying 10 percentage points, from about 55 percent to just 45 percent. That decline, much sharper than in previous recessions, has reduced the share of employed young people to the lowest levels in 60 years.
What most Americans might find surprising is that our employment-to-population ratio that Brownstein cites is now worse than Europe's, for the first time since we started keeping data.
He quotes the eminent Larry Katz of Harvard, who says we are at risk of experiencing a "lost generation" in American life.
This sounds preposterous at first, but as you examine the data, the risk is real, even imminent.
The challenges we face as a result are many. This problem has grave consequences for the entitlement programs we are currently trying to reform. It presents the very real possibility that today's rising generation will do worse than their parents, since the longer it takes to start earning good wages, the less chance you've got of earning them later. The problem presents us for the first time with a kind of intergenerational warfare we've never really experienced before. And it doesn't bode well for the need that we have to continue to stay above replacement rates on the population front.
It's uncomfortable talking about problems for which there are no easy answers, but we need more public leaders discussing this issue anyway.
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